EY's research on private equity exits makes a blunt case: data readiness drives valuation. The firm reports that nearly three quarters of surveyed firms identify weak data and KPI reporting as the biggest finance issue at exit, and that many struggle to reflect their value creation credibly in reported EBITDA when buyers start asking questions.
The lesson carries over directly to family businesses and founder-led companies. Due diligence rarely kills a good business, but it regularly kills momentum: when the data room has to be assembled from scratch, weeks pass and every delay erodes trust and price. We advise clients to treat deal readiness as a by-product of good administration, with annual accounts, tax positions, contracts and management reporting kept complete and consistent, and the bookkeeping able to produce specifications behind every material number. In our practice we have set up many data rooms; the difference between a prepared and an unprepared seller is measured in months.